Tax And Ni On Low Earnings

[jubieanna]

I have recently taken voluntary redundancy from my job. I have started looking after a downs syndrome lady as respite for her parents. I am earning £100 per week for this. They pay me through money they get from government called Independent Living Fund.

Do i have to pay tax and Ni on this money. if so how do I pay it?

Thank you

[ummmm]

Register with HMRC as self employed. They will send you a self assessment form to fill out each year and they will send you a bill for anything that's owed.

On £100 a week it will be very minimal.

You can pay voluntary NI https://www.gov.uk/voluntary-national-insurance-contributions/deadlines

[jubieanna]

Thank you for your reply ummmn
I think I will contact HMRC to clarify this as some people i have spoken to have said that £100 per week is below the amount that you have to earn to start paying tax and NI. But I thought if you didnt pay NI then your pension is affected.

[jd_1984]

http://taxaid.org.uk/guides/information/an-introduction-to-income-tax-national-insurance-and-tax-credits/national-insurance/national-insurance-for-employees-and-employers/national-insurance-thresholds

http://www.revenuebenefits.org.uk/tax-credits/guidance/how-much-can-your-client-get/national-insurance-credits/

http://www.nus.org.uk/en/advice/money-and-funding/students-income-tax-and-national-insurance1/

There is sound advice online, a few pages to start your research are above.
HMRC are always a good start too.

[Jackdaw33]

If that is your only income then you won't pay tax on as it is less than the personal allowance. As to pension, contact the DWP and ask for a pension forecast. If you have paid 30 years' worth of NI contributions your pension will be unaffected.

[jubieanna]

Many thanks I'll have a good look at all the advice

[jubieanna]

Thank you Jackdaw. I have always worked from the age of 16 to 51 aprt from a 5 year break to have my children. I will contact DWP as well to check

[Jackdaw33]

The personal allowance is currently £10,600 p.a. which means that any income up to £203.85 per week is tax free. Not sure about NI, though.

[New Judge]

If this is all the income you have there will be no tax or NI due as the amount involved (£5,200 pa) falls below the income tax threshold (£10,600) and the NI threshold (£8,060). (This assumes that the tax and NI on your previous employment was all paid up to date).

Beware of registering as Self-employed. HMRC has rules about who is eligible to do so and who is not and the position you hold may not be eligible. Some guidance here:

https://www.gov.uk/government/collections/employed-or-self-employed

[jubieanna]

Thank you all for the advice its much appreciated